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JuniorLion 12-12-2018 06:35 AM

Quote:

Originally Posted by brown56 (Post 118063354)
Hi BBCWatcher,

I got 20 to 30k in a US Citibank Account. Instead of letting it idling, I am thinking of transferring back to Singapore so that I can better utilise the $. I read Transferwise is one possible means. A direct transfer between USA Citi and Sg Citi is another method, however I will be subjected to the bank unfavorable forex. Do you know of any other more cost effective way of transferring back the USD to SGD?

Opening an investment account to buy US stocks for the long term is another possible use of the USD. However, I am still finding the best account to open while I am physically in Singapore.

Thank you in advance for the advice.


That's simple.

You open a SG Citibank Account, and then you can do a Citibank Global Transfer (CGT) from US Citibank to SG Citibank at no extra charges.

Alternatively, you can open an Interactive Brokers account, and then use your US Citibank to fund the broker account.

BBCWatcher 12-12-2018 06:44 AM

Quote:

Originally Posted by brown56 (Post 118063354)
I got 20 to 30k in a US Citibank Account. Instead of letting it idling, I am thinking of transferring back to Singapore so that I can better utilise the $.

Well, you could do that, but there’s a cost. I don’t think it’s a good idea to accept a currency conversion cost unless you really need the target currency (Singapore dollars in this case) for something(s) you need now that you can only buy with the target currency, and you don’t already have enough of the target currency.

On the other hand, U.S. dollars are darn useful. You can buy all sorts of wonderful things on Amazon.com with them, for example. It’s also the most common currency accepted for popular long-term investments, such as the extremely popular IWDA global stock index fund.

Bear in mind Citibank U.S. probably has a minimum balance requirement to avoid a monthly fee.

Quote:

Do you know of any other more cost effective way of transferring back the USD to SGD?
The very best way, if it works for you (and see above, since it’s consistent), is to spend those dollars on real goods and services that you need (or at least want) via an attractive U.S. credit card. There are some U.S. credit cards that pay a flat/unlimited 2% rebate, have no foreign transaction fee, and have no annual fee. In other words, the card pays you a net rebate to use it. You’re never going to beat that with a fund transfer/conversion.

But see above. U.S. dollars are very useful as U.S. dollars, widely accepted for lots of stuff.

Quote:

Opening an investment account to buy US stocks for the long term is another possible use of the USD. However, I am still finding the best account to open while I am physically in Singapore.
Well, you could open a Schwab account. That’ll require a S$25,000 (or equivalent in U.S. dollars; and U.S. dollars is the “native” currency at Schwab) minimum (if you’re a resident of Singapore), so you’re in the zone. Then you can park those U.S. dollar funds at Schwab in U.S. Treasuries absolutely free of charge, and that’s both safe and higher yielding. Until you decide what else to do. I don’t think Schwab is the greatest choice otherwise unless you happen to be a U.S. person.

Schwab lets you buy U.S. Treasuries at initial auction free of charge and hold them to maturity free of charge. U.S. Treasuries are U.S. tax free for non-U.S. persons — both U.S. income tax free and U.S. estate tax free. And they’re the safest place to park U.S. dollars, although you’re in fine shape already because your Citibank deposit is fully U.S. FDIC insured (minimum US$250,000 deposit insurance limit).

BBCWatcher 12-12-2018 06:46 AM

Quote:

Originally Posted by JuniorLion (Post 118065480)
You open a SG Citibank Account, and then you can do a Citibank Global Transfer (CGT) from US Citibank to SG Citibank at no extra charges.

No, there’s a charge for that. Citibank extracts its pound (kilo?) of flesh in the currency conversion rate. It’s a decent but not outstanding rate.

Quote:

Alternatively, you can open an Interactive Brokers account, and then use your US Citibank to fund the broker account.
Could do that, but Interactive Brokers will have a monthly minimum commission of US$10 at this level of funding. However, IB would be an excellent choice if additional monthly saving/long-term investing is going to start soon.

TheHeist 12-12-2018 08:30 AM

Quote:

Originally Posted by BBCWatcher (Post 118065458)
.... That’s still pretty good, though. This sort of top up will flow into all three accounts according to the regular allocation percentages for his age. The portion flowing into MA will likely boost him back to his cap, and so some portion of that should spill over into his SA. SA and OA funds (in that order) are available for “on demand” withdrawal and earn an attractive interest rate. Yes, he might be able to qualify for some more bonus interest since it appears he still has some room below $60,000 across his accounts, the minimum needed to qualify for maximum bonus interest....

In order for OA and SA to be available for "on demand" withdrawal, does the account holder's RA need to meet his/her cohort FRS first?

BBCWatcher 12-12-2018 10:28 AM

Quote:

Originally Posted by TheHeist (Post 118066205)
In order for OA and SA to be available for "on demand" withdrawal, does the account holder's RA need to meet his/her cohort FRS first?

Usually, but this hypothesis is testable with, say, a $20 "all three" top up.

blue_line 12-12-2018 07:37 PM

Quote:

Originally Posted by TheHeist (Post 118066205)
In order for OA and SA to be available for "on demand" withdrawal, does the account holder's RA need to meet his/her cohort FRS first?

My mum and dad did not meet their cohort's FRS. They are now nearing their 70s.

The CPF website allows them to withdraw their OA/SA balance "on demand". However, I've called the CPF hotline and they said that we won't be able to withdraw the balance as they did not meet their FRS. :s11:

I will likely try to withdraw their balance soon as I am thinking of transferring their OA/SA funds to RA to boost their CPF LIFE payout and also to qualify some tax benefits for myself and siblings.

salmonella 13-12-2018 08:57 PM

Quote:

Originally Posted by BBCWatcher (Post 118065458)
You cannot do anything. It becomes his RA savings, which is what you want of course.

Thanks BBCWatcher. Yeah, wanted to know what he would be able to do. Did some further research which leaves me further questions and I'll touch on this below.

Quote:

Originally Posted by BBCWatcher (Post 118065458)
To some extent. There’s a CPF Annual Limit that must be respected ($37,740) when making this “all three account” top up (CPF Form VC/1 or equivalent). If he’s not working and nobody has made any MediSave or “all three” contributions yet for 2018, then the full $37,740 limit is available this year (December, if you don’t delay too long) then another in January (assuming no further top ups that would bust the Annual Limit). There’s no tax relief, but between December and January you could get up to $75,480 pushed into his SA, OA, and MA accounts.

And there’s the rub, because some of these dollars would likely flow into his MA, which is in decent shape already. His MA cap would have been set on his 65th birthday about 7 years ago (2011) I think, so let me take a look at that.... $41,000 I think, but this worked a bit differently under the old system. That’d be something he should confirm with CPF.

Okay, I'd assumed that the BHS of his cohort would be $49800 based on https://www.cpf.gov.sg/Members/FAQ/s...hcare/medisave (What is the Basic Healthcare Sum) but will check with CPF.

$41,000 would work out better for him, I guess. May I know how you derived it, to seek clarifictions with CPF?

Quote:

Originally Posted by BBCWatcher (Post 118065458)
That’s still pretty good, though. This sort of top up will flow into all three accounts according to the regular allocation percentages for his age. The portion flowing into MA will likely boost him back to his cap, and so some portion of that should spill over into his SA. SA and OA funds (in that order) are available for “on demand” withdrawal and earn an attractive interest rate. Yes, he might be able to qualify for some more bonus interest since it appears he still has some room below $60,000 across his accounts, the minimum needed to qualify for maximum bonus interest.

Maybe your MediSave cap figure is correct, but please check that. It might be $41,000 or something different.

Yikes, according to the CPF contribution allocation calculator, for age group above 65, 84% of the contribution would flow into MA, and 8% each into OA and SA. So even a $30k contribution would see $25200 go into MA, and certainly putting him back to its cap.

Quote:

Originally Posted by BBCWatcher (Post 118065458)

....And then you ask a good question: would any of these “all three” top up dollars then flow into his RA? I’m guessing not since his MA got pretty high and he already put his RA into some private annuity somehow, which would seem to imply he hit his set aside under the old plan (or might be able to opt out now). Are you sure it’s a private annuity, though? Did he opt into CPF LIFE? That’d be consistent with what he’s seeing. You/he can certainly test the “all three” top up and see how it flows by making a $20 “all three” top-up right now (December 12 as I write this), to see how it flows into his accounts. If you use PayNow QR then it should be credited within 24 hours or so, and you can see the results pretty quickly. Then you still have enough time to decide what you’d like to do for the rest. (Also ask CPF, of course, but this is something you can trial rather easily to get some reasonable assurance the results will be as you/he wish.)

From the Medisave FAQ "I have saved the Basic Healthcare Sum (BHS) in my MediSave Account. What happens to my MediSave savings above the BHS?", for persons above 55, the excess goes into RA instead of the SA...

Yes, I'm sure he bought an NTUC annuity (just wasn't sure it was purchased from RA or from OA/SA withdrawals or something else). He's not currently on CPF Life, and is not required to join it.

So it's back to figuring out the best use of RA - whether it is CPF Life, something else... and whether it can be treated as a piggy bank.

BBCWatcher 13-12-2018 10:33 PM

Quote:

Originally Posted by salmonella (Post 118092092)
Okay, I'd assumed that the BHS of his cohort would be $49800 based on https://www.cpf.gov.sg/Members/FAQ/s...hcare/medisave (What is the Basic Healthcare Sum) but will check with CPF.

That’s most probably correct. The $41,000 figure was the applicable figure when your father turned 65, but I forgot that the freeze was only introduced more recently.

The $7,000 top ups (per qualified donor — siblings for example) now and in January seem like good ideas. Past that it gets more unclear, but it’d be good to make decisions this month to get them credited this month.

kaiser chief 14-12-2018 04:29 PM

Really glad for this plethora of info laid out here. Thanks to BBCWatcher and the lot that participate in this group.

Now as i'm beginning to (re) kick-start my investment plans, wanted to check in and understand the rationale beyond the usual ETFs (VWRD, IWDA etc), what about this for example: https://secure.fundsupermart.com/fsm...heet/NYSE/CURE

Yes, the expense ration and management fee is high compared to the ones often recommended but wouldn't the higher annualised returns make up for that higher cost? In this case, the 5 year annualised returns stand at ~32.4%.

Just trying to get my head around this, thanks for your thoughts in advance!

BBCWatcher 14-12-2018 04:56 PM

Quote:

Originally Posted by kaiser chief (Post 118103875)
Now as i'm beginning to (re) kick-start my investment plans, wanted to check in and understand the rationale beyond the usual ETFs (VWRD, IWDA etc), what about this for example: https://secure.fundsupermart.com/fsm...heet/NYSE/CURE

Yes, the expense ration and management fee is high compared to the ones often recommended but wouldn't the higher annualised returns make up for that higher cost? In this case, the 5 year annualised returns stand at ~32.4%.

"Past performance is not indicative of future results."

If you want to speculate (a polite word for gamble) on U.S. listed healthcare stocks, in an expensive way (both in terms of taxes and management fees), and in a risky way (this is a 3X amplified vehicle), then you could choose that fund. But if you insist on gambling I suggest you look at the stock futures market instead.

....Did you just go look at a list of funds that have recently experienced a huge price gain? Is that how you shop for laundry detergent -- you look for the detergent that has zoomed up in price the most and buy as much of that detergent as you can? You do see the problem with this buying philosophy, right?

kaiser chief 15-12-2018 01:48 AM

Thanks for the reply BBCwatcher
To be honest, yes as I was trying to gauge the criteria for what makes the recommended etfs tick vs these others. An internal devil's advocate of sorts to help me understand it abit more.

Appreciate the candour! My current plan is a monthly buy of around 1500 into vwrd and iwda, as a start!

BBCWatcher 18-12-2018 10:22 AM

For what it's worth, I've made one minor savings/investing adjustment today.

From time to time (every year or so) I review whether I should adjust my monthly savings flow to a new, sustainable plateau. Since I have the happy problem of "too much" cash piling up, and since there is some inflation, I've decided to increase that flow by about 8%, calculated ex-CPF.

I'm quite fortunate in many respects, including these important financial respects: (1) I started saving every month right at the beginning of my full-time working career; (2) I have periodically, steadily ratcheted up that total monthly figure and have never had to reduce it; (3) I haven't missed a month yet over these decades (plural); and (4) I've avoided speculation or gambling, just focusing on stone simple, prudent, low cost, well diversified, age/risk appropriate, long-term investing.

So far, so good. It's boring, but it should be, and boring works.

wannabelazy 20-12-2018 02:51 PM

Hey BBCW, I understand you're in favour of a lower allocation to Singapore stocks vs global stocks (20/80). Do you think there's a case for an even lower allocation? i.e. (10/90). I can't help but feel like including more STI to benefit from a potentially appreciating SGD isn't worth it compared to getting better diversification from just buying more global stocks.

I also find it hard to imagine a scenario where the local market would be doing well while the global market isn't. Is it wrong to think this way?

Extech 20-12-2018 10:09 PM

Hi BBCwatcher, asking this on behalf of my mum, who has two health insurance policies. One under my dad's company, which I shall call COMPANY, which requires no co-payment. The other is my mum's own personal insurance, which I will call PERSONAL, which requires 10% co-payment. So dad's idea so far was to:
1)Submit the bill to PERSONAL, and pay the remainder 10% out of own pocket
THEN
2) Submit the bill to COMPANY, and get the 10% co-payment covered by PERSONAL.

Everything has been going well so far- PERSONAL has covered the 90%, and the 10% out of pocket is being reimbursed by COMPANY

However, we were recently informed by COMPANY that they will start to charge a 20% co-payment as we had exceeded the cap. When queried, COMPANY revealed that they had been paying the full bill- reimbursing the 90% billed amount to PERSONAL, and then covering the remainder 10% co-payment as a cheque to us

My question is:

a) Is the transfer of money from COMPANY to PERSONAL a industrial standard/normal, or is this an anomaly?
b) How strategy can I adopt to reduce out of pocket expenses?

BBCWatcher 21-12-2018 09:15 AM

Quote:

Originally Posted by wannabelazy (Post 118201081)
Hey BBCW, I understand you're in favour of a lower allocation to Singapore stocks vs global stocks (20/80).

Lower than Shiny Things’s recommendation, yes.

Quote:

Do you think there's a case for an even lower allocation? i.e. (10/90).
“No more than 20%” is how I’ve phrased it. And, to be clear, this “no more than 20% STI stocks” suggestion is for individuals who plan to retire in Singapore (and who already possess a right of abode in Singapore) and who are >7 years away from first drawdown age.

Quote:

I can't help but feel like including more STI to benefit from a potentially appreciating SGD isn't worth it compared to getting better diversification from just buying more global stocks.
I agree. I don’t like the risk of too severely (in my view) overweighting 30 stocks that happen to be listed and traded in Singapore for the whole of one’s accumulation phase, especially given how MAS manages the Singapore dollar, with a loose peg to an undisclosed, trade-weighted basket of currencies.

Quote:

I also find it hard to imagine a scenario where the local market would be doing well while the global market isn't. Is it wrong to think this way?
That is possible, but that’s not a bet I want to make and hold so heavily for so long (30+ accumulation years), especially when I would already be making that bet with a primary residence in Singapore (typically), and Singapore dollar bonds and bond-likes (e.g. CPF). And there’s already a great deal of protection against adverse currency swings in the dollar cost averaging during accumulation phase and in portfolio adjustments in the 7 (or up to 10, if you’re really conservative) year period before drawdown age.

Anyway, I agree with you, for the period >7 years away from drawdown age.

Quote:

Originally Posted by Extech (Post 118208387)
Hi BBCwatcher, asking this on behalf of my mum, who has two health insurance policies....

However, we were recently informed by COMPANY that they will start to charge a 20% co-payment as we had exceeded the cap.

Yes, the annual limit on the “COMPANY” insurance plan has been reached, evidently.

Quote:

When queried, COMPANY revealed that they had been paying the full bill- reimbursing the 90% billed amount to PERSONAL, and then covering the remainder 10% co-payment as a cheque to us
OK.

Quote:

a) Is the transfer of money from COMPANY to PERSONAL a industrial standard/normal, or is this an anomaly?
It’s normal. The two insurance carriers/policies are coordinating coverage and payouts. Evidently the “COMPANY” policy is acting as primary coverage, so it’s paying the full bill...until the annual limit is reached.

Quote:

b) How strategy can I adopt to reduce out of pocket expenses?
Well, it’s still possible to file claims against the “PERSONAL” policy (too), and that has a 10% co-pay after the “COMPANY” policy runs out for the year. Also, starting on January 1 (soon), presumably the “COMPANY” policy gets a new annual limit. So that should be the worst case (10% co-pay for the rest of the year, after the two insurance companies coordinate). I also assume the “PERSONAL” policy hasn’t hit its annual limit.

I assume that all claims are filed with both carriers/policies, and that you’re letting both carriers know about the other. I think they ask that anyway when you file a claim.

Anyway, as long as you’re filing the claim with both and letting both of them know about the other, that should be fine. They should coordinate. I’m not sure if you get to choose which carrier/policy is “primary,” and which is “secondary,” but you can ask.

Quite often your personal policy will have an annual deductible — base Integrated Shield plans are like that — and so your personal policy won’t pay anything initially, but the company plan will. That’s also normal, but you still have to let the company’s claims handler know about the personal policy.

If you have any concerns about how and whether they’re coordinating correctly, pull out the claim reports and call each of them, to ask them to explain how they arrived at their numbers.


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